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Ad decline at Mecom slows

Ad revenue at European newspaper group Mecom fell by 3 per cent year on year in the first three months of 2010, the company reported today, with March up 5 per cent but April "more subdued".

Mecom said that the figures showed the continuing recovery of the ad market. It has previously reported an 8 per cent year-on-year fall in revenue in January and February, with March actually up 5 per cent year-on-year.

The company - run by the former Mirror Group chief executive by David Montgomery - expects print ad revenue to fall overall year on year in the first six months and be flat in the second half of the year.

"This comparatively strong March performance included a greater benefit from pre-Easter trading, which fell later last year," the company said. "Advertising performance in April 2010 has been more subdued than in March. However, taking both March and April together to normalise for the effect of the timing of Easter, the underlying slowing of advertising decline continues."

Mecom said it expects earnings before interest, tax, depreciation and amortisation to be up more than 10 per cent year on year for the first quarter of 2010.

The company, which has promised to increase its digital revenues by €100m (£90m) in three years, said that its long-running cost-cutting programme had led to a 7 per cent year-on-year reduction in costs in the first quarter.

Mecom's two largest operations, in the Netherlands and Denmark, saw ad revenue drop 3 per cent and 4 per cent respectively in the first quarter. Norway reported a "marginal" increase in ad revenue while Poland reported a 10 per cent year-on-year fall for the first three months. The company said that total revenues were down 2 per cent year on year with circulation revenues up by the same amount.

"Although recent improvement in market conditions has brought some encouragement, we remain cautious about the prospects for full-year advertising," the company said. "Consistent with previous guidance we continue to expect that print advertising revenue will decline overall in the first half of 2010 followed by flat revenues in the second half, with compensating growth in online advertising."